Their new rules will ensure customers can’t get real green tariffs in the UK – all they’ll be able to get will be ‘green’ tariffs where trees get planted or carbon gets offset – cuddly, stupid, and quite pointless ‘green’ tariffs.

This is how OFGEM think they’re going to straighten out consumer confusion – by redefining green tariffs as being about anything but investment in new sources of green electricity.Here’s a bit of background –

OFGEM decided a while ago that customers are confused, that they’re not clear on the benefits that green electricity tariffs really bring and this is preventing larger scale take up (of green tariffs) – so they’ve decided to intervene, after 12 years of doing nothing at all in this sector, and set up an accreditation system that will give customers confidence in what they are being offered.

Sounds fair enough and who could object to that? Not us certainly, not in principle. But in their press release OFGEM left out the details that count, they probably didn’t want to spoil a good story.

Before we get into that, one thing that tickled us –

OFGEM said the system will be voluntary. Er, except that, in the same press release, OFGEM made it quite clear that if the industry does not ‘voluntarily’ adopt the scheme – it will modify supply licences to make it mandatory. Oh that kind of voluntary… silly us.

It’s a marvelous new scheme, unveiled by press release, voluntary in a Soviet Union kind of way – and just six weeks to go before kick off. Who says that Quangos don’t know how to get things done…?

The vital bit of information the press release left out –

OFGEM’s big idea is to accredit tariffs on a ‘bronze, silver and gold’ basis, based on how much money gets spent per customer per year – it’s a fabulous idea, we’ve been pushing the use of spending per customer to cut through corporate green BS for many years. We suggested the very same thing to OFGEM and we’ve been publishing the spending figures of all the UK’s suppliers each year at whichgreen.org.

There’s a ‘But’ though, and it’s huge.

Under OFGEM’s proposed rules electricity companies can spend money on anything they like (pretty much) except, guess what… Building new sources of green electricity. We kid you not.

You’ll be able to buy tariffs that plant trees, carbon offset (yes seriously), pay money into vague funds, promote energy efficiency (help old ladies across the road? not quite) – just about anything with an environment claim to its name – except the one thing that’s really needed and the one thing green tariffs are supposed to be all about – Green Electricity. You won’t be able to get any of that.

Honestly, that’s their big idea. We couldn’t have made this up.

And the probable outcome –

OFGEM is going to mandate Greenwash. That’s what ‘green tariffs’ will become. Greenwash forced on green consumers, mandated and authenticated. And OFGEM will ban real green tariffs into the bargain. Well, ban them from being called green anyway.

Green electricity tariffs will become some kind of charity ghetto where customers elect to pay premiums to see contributions made on their behalf, to the cause of their choice. Be that tree planting, rainforest preservation, protecting wildlife – whatever. Good enough causes no doubt, but this isn’t what green tariffs are supposed to be about.

The one thing customers won’t be able to get is a real green tariff, one that dedicates itself to actually building more green electricity – and one with green electricity in it. How on earth that makes sense we don’t know.

Ecotricity founded the now global green electricity movement. We’ve done as much as anybody and more than most to promote it and make it appeal to a wide audience.

We spend each year more than ten times enough money per customer to qualify for OFGEMs puny gold standard – but we won’t be ‘allowed’ to describe our tariffs as green. Even though that money goes into building new sources of green electricity, the stuff we desperately need.

What more can we say.

OFGEM are going to set mandatory rules for green tariffs to be regulated by – and green electricity won’t qualify.

That’ll make things easier for customers to understand – you can have anything in your OFGEM approved ‘green’ tariff – except green electricity.

24 responses to “OFGEM plan to outlaw green electricity tariffs.”

Have you got some words that we can send to Ofgem and/or our M[E]Ps, etc?

Rgds

Damon

Simon

August 19, 2008 at 12:06 pm

What a complete load of nonsense. ‘Green’ electricity has always been in my opinion a tariff which either supplies you with electricity from renewable sources or is involved in investing in new build of renewables.

Is this actually final or will they be consulting the public or energy companies on this?

Couldn’t the argument be made that you are carbon offsetting by building new renewable generation 🙂

Kev

August 19, 2008 at 12:35 pm

What the **** ?!

I thought Carbon Offsetting was one of those stone aged ideas we ditched along with Biofuels!! (Oh no wait a minute, we didn’t ditch Biofuels did we!) On account of the fact that a tree will only absorb the tonne of carbon (on average) over many years .. IF it lives a full life – which is increasingly unlikely under our ‘glorious’ Labour ‘build on everything’ govt!!

So who’s paying Ofgems wages these days then? British Gas?

Independent my *** !

nommo

August 19, 2008 at 7:49 pm

shocking.. I am *almost* speechless..
So where does this leave our governments renewable energy targets? What incentives are the big six expecting to get started on a serious building drive? Surely it wont be down to ecotricity alone to change the way electricity is made in the uk? It makes me reach for my tin foil hat – but there is still a chance it is just stupidity…
Anyway – sustainable/renewable energy always sounded better than green energy to me 🙂

Chris

August 20, 2008 at 8:41 am

The best way to fight this Dale is to release a full page advert in the national press! Make it a talking point! ..

“OFGEM supports green ducking & diving.”

“Here are the REAL figures behind true green investment”

I try to pass on your which green site to whoever wants to listen, but there’s only so much word of mouth can achieve.

Ted Marynicz

August 20, 2008 at 10:09 pm

Dale, I’m confused. When I read that OFGEM press release about a month ago I saw it as ‘a good thing’ based on their statement that simply spening money from ROCs and CERTs would no longer be enough for a tariff to be considered ‘green’ and that ‘additionality’ would need to be proved.

I presume you now have more information on the proposed “Independent body” whose job it will be to accredit green tariffs?

Stuart

August 21, 2008 at 11:19 am

Hey this is an opportunity – not a threat. Green Electricity is a nonsense. My leccy is colourless and it needs to appeal to a market beyond the sandal eating lentil eaters.

Call it what it really is: ‘Low Carbon Electricity’

Then you get what you buy – less carbon released which is quite different to trying to mop it up.

‘Green’ is already discredited because being vague – any strange interpretation can be in the can as Ofgem have wonderfully demonstrated.

Phil

August 22, 2008 at 2:31 am

Poor environmental policy management in government? Surely not! Dumbing down tarrifs for us peasents? Good lord!

Having read the press releases, they seem overly simplified and a bit vague. They do seem more concerned with the “touchy feely” angle to addressing climate change because they know that the average Joe connects more with a planted tree than a bit of wind (so to speak). Re-education!

Like any government department, they will learn slow and act slower, we can only hope it doesn’t end up being too little too late.

Once again though, the apathy of the masses might ensure that this doesn’t get the scathing attention it deserves.

We thought about lobbying OFGEM and MPs and stuff and perhaps a campaign involving green electricity customers. But for one thing the time frame is so incredibly short I don’t think we could get a big public momentum behind us anyhow – and for another we’re convinced nothing (short of something massive) will deflect OFGEM from this. I appreciate your offer nonetheless.

We’ve written up our position on this and posted on the Ecotricity site, you can find it here. It pretty well sets out what we think is wrong with the scheme and why, please feel free to use any parts of this. (It is *slightly* different than the text above).

OFGEM had been working with the industry for about 12 months before this announcement and the scheme taking shape then was very very different. And then some intense lobbying appeared to take place behind the scenes. A common enough feeling at the time was that British Gas were kicking up a big fuss. Then personnel changed at OFGEM and next thing you know hey presto out came this radically new looking proposal.

I reckon all of the Big Six will sign up to this and be very pleased with it (and themselves) – it gives them all a green badge of ‘credibility’ (and OFGEM backed no less) while allowing them to dodge the real issues – building more green generation. Quite perfect.

Cheers.
————–
Hi Ted, I felt the same thing but the press release missed out some vital details – in this case green electricity and spending on building the stuff, won’t qualify as additional. That’s the crazy part. OFGEM reckons that these are ‘business as usual’ activities and so we have to find other ways to do something for the environment, like plant trees (cause that’s not happening anyway… :)).

The devil was in the detail they left out – their definition of additionality.

Cheers.
————–
Hi Simon, I agree with you, green tariffs should be about green electricity supply and building new sources (both preferably, not one or the other though).

In their press release OFGEM announced it was consulting the industry on their proposal and set a date of just a few weeks for responses – closing date was the 27th of Aug. But they also made it pretty clear this is how it’s going down, voluntary or not. Bit like the governments ‘consultations’ on the future of nuclear energy really – it’s about being seen to consult, and listen etc etc…

Building new green generation does reduce carbon (as opposed offset it) but this won’t cut any ice. Offsetting will probably be allowed under OFGEMs new rules (to make a tariff officially green) but offsetting always (pretty well) has to take place outside of Kyoto signatory countries – that’s its test of additionality of you like, it has to happen in the developing world. I guess OFGEM would allow us to build windmills on the other side of the world in that case and call our tariffs at home green – but that just shows you how stupid the whole concept is.

By the way, it wasn’t long ago that some government person suggested we should be able to build windmills in the developing world and use them to meet our European renewable energy targets. Maybe this is all part of the governments ‘joined up thinking’…

I’ll think about who to lobby in government, since for example I didn’t get so much as a polite acknowledgement of my existence from Mr Woolas, but OTOH I have spoken to some fairly reasonable people inside Ofgem…

…

Another idea for you, BTW, that a uni researcher and I brewed up over email in the last few days:

Have you considered approaching NG and Ofgem to see if they would be interested in a pilot, within existing grid codes, where they apply explicit (voltage based) demand reduction at expected peaks *this winter* even where they otherwise expect to have enough generation available? [Given probable seasonal and daily variation in kg CO2 / kWh, might knock a decent fraction of a % off all electricity-related CO2 emissions instantly.]

BTW, I hope you’ll do a smart ToD/HH/dynamic metering trial I can join soon, pref that incorporates CO2 element over and above the common wholesale rate + margin, because I’d definitely like to be able to see how to minimise CO2 emissions day-by-day. And then of course buying my PV energy *might* be worthwhile as with any 2-way system you’d know what I was tricking in, and generally at times of high wholesale prices…

See section 5.4 for the pretty graph of load reduction my voltage reduction, peaking at 1200MW.

Note that I was wrong above about 570MW being load-shed by the low-frequency relays: it was 581MW (though should have been more like 1700MW, so maybe the karma-protection devices kicked in instead B^> ).

Rgds

Damon

Rob

September 25, 2008 at 4:42 pm

So Friends of the Earth’s autumn comic says that Good Energy have “the only 100% Green” tariff”… Is this the start of these dodgy claims? Seems certain folk around here have a greener 100% green tariff.
Ho Hum.
Rob

Isn’t it amazing that they can supply all their business and domestic customers with an exclusive 100% green tariff by building so little in terms of generation..?

“Good Energy Generation owns a wind farm in Delabole and has made an investment in Bro Dyfi Community Renewables.”

It continues:

“The wind farm site at Delabole has been generating electricity to the local electricity distribution network since 1991. The site comprises ten (10) 400kW wind turbines, whose production figures of the last 10 years show average annual generation of 10,000MWh, which is sufficient to supply the equivalent domestic energy needs of 3,000 homes annually, based on electricity usage of 3,300kWh per household.”

They also ‘invested’ in a 500kW community owned Bro Dyfi turbine near CAT in Wales…

It’s a bit early for doing the maths – but at over 25,000 – their customers are around 9 times their stated generation capacity… there is no-where that I can find on their websites that explains how the shortfall is filled… apart from hints of microgeneration…

Hi Rob, FOE seem to have got a bit carried away, not only do they claim only GE has a 100% tariff, they also say it invests in new build (which it doesn’t). We’ve tried to talk to them for the last 6 months but they refused.

They’re making false claims about what GE actually does and recommending their members and perhaps the wider public take the most expensive electricity in the UK from a company that spends nothing building new sources – I think they’ve lost the plot a little.

Cheers.

Rob

September 26, 2008 at 3:19 pm

FoE comic: Earthmatters. Their action magazine that drops through my letterbox quarterly. Usually includes a selection of campaign info, MP bothering recomendations, etc. But with this issue recommending signing up to a paler green electricy supplier I’m wondering how accurate their other info is.
I left my copy at work – I’ll being it home next week and start bothering them about their accuracy.
Rob

Hi Rob, what’s quite amazed me is the wild inaccuracy of the claims FOE first made, and then when challenged on the facts – the response was all spin and greenwash.

For example – we pointed out to them that their claim that Good Energy was the first 100% green supplier was untrue, we were a few years ahead of them on that. The response from FOE was that GE were the first domestic supplier (and that’s what they meant to say.) That’s anyway equally untrue, we’re about to point it out.

They first claimed that GE funds new green build – a false claim, and when challenged said ‘oh well they support new build by placing power purchase contracts blah blah’

And so it went on. Spin, evasion and greenwash.

FOE have done little or no research on this, they’ve just taken the GE corporate line and repeated it, and when challenged they’ve spun and evaded the issues. The kind of behaviour we are all more used to FOE slamming some corporate bad guys for.

What on earth are they thinking?

Cheers.

Rob

September 30, 2008 at 4:12 pm

Complaint sent to FOE 30 Sept 2008:

“EarthMatters, Iss 71 Autumn 2008

I must admit to being rather shocked by the current issue of EarthMatters. FOE is the last organisation I’d expect to be pushing any company in exchange for 13 pieces of silver.
The article “Switch to Good Energy” promotes ‘Good Energy’, which, coincidentally is offering £30 cash donation to FOE for each member who signs up. However the article contains gross technical inaccuracies, such as the statement “Good Energy is the only UK electricity supplier to offer 100 per cent renewable energy.” – This is blatently untrue. Ecotricity have offered a 100% green domestic tarrif for several years and I have been using it. I’m sure other suppliers are also offering 100% green tarrifs for varying degrees of ‘greeness’.
Further the article makes it clear that Good Energy are not even in the business of generating the green energy that they sell, primarily they are just in the ‘me too’ business of buying up general market ‘green’ electricy and passing it on for a premium. This is not progressing Green Energy. I’d much rather have my money with a supplier who both offering a 100% green tarrif AND is investing in future green infrastructure. That supplier is not ‘Good Energy’.

As an FOE supporter I rely on FOE to provide accurate and true environmental information in areas where I have no specialist knowledge. To find such gross errors in an area where I do have experience casts significant doubt on all information from FOE.
I will expect a correction to these inaccuracies in the next issue of Earthmatters.
Please do better.
Rob”

Rob

September 30, 2008 at 4:25 pm

Hi Dale,

At they’re claiming 24% renewable content for Ecotricity (obviously ignoring ‘New Energy Plus’ tariff). Ecotricity web page claims 30% and rising renewable in the ‘New Energy’ tarrif. I’m thinking this looks like an ASA issue that I can raise – can you confirm the current Ecotricity stats?

I think you make very good points here. It will be interesting to see how FOE respond. I think they’ve made a massive error of judgement, and if they live by their own standards they will admit it. That’s the acid test for them now.

We tried for six months this year to talk to FOE, and they refused us point blank, wouldn’t even meet to hear us out – they told us they were going to work with GE and that was it. That’s the true extent of their research in this, not only did they fail to investigate properly, they refused to listen.

WRT your other comment – The ASA’s remit doesn’t cover with the web – so they can’t do anything about that GE image on their homepage… (which we have mentioned to GE btw). Printed material *is* their bag though, and I think you are right – if FoE say “Good Energy is the only UK electricity supplier to offer 100 per cent renewable energy” in print – that is blatantly not true and the ASA could deal with it.

I think it’s the kind of wildly false claim that FOE would slam some corporate outfit for, so pretty poor of them to do this.

Happy to confirm our figures for you:

We predicted 30% for the year that ended this April (08) – the years for these figures run April to April for some reason.

We actually delivered 37% for that year, now that all official stats are in.

For this year, the one were half way through (April 2008 to April 2009) we’re forecasting 50% and we expect to hit that at least.

The 24% figure is very old, probably 06/07. So two years from actual.

The big thing about these stats is they are historical, most people don’t get that, or get told that. For the work we do, it’s particularly unhelpful because our % moves every year quite considerably. The right % for a potential customer to see is actually the in-year forecast – that’s the one they’ll be getting (50% this year), the rest is history.

Good Energy and perhaps FOE these days, are quite happy to quote old low figures – it suits them.

The other thing is that FMDs (Fuel Mix Disclosures) are company wide… not tariff specific – so the fact that we have two tariffs actually makes it easy for GE to use ‘semantricks’ to try make you think that they are the only company supplying 100% green energy in the UK. FMD is one of those things that actually meant to make things clearer and easier… 🙂

What it doesn’t say is the proportion of turnover or profit which goes towards renewable new build and I agree with Dale this is the crucial need in society: i.e. building new renewable capacity (and building it quickly).

I think there is some call for a second column in the FMD which describes the “proportion” of profits which went into New Build. This would illustrate if a large company which is building some wind turbines is really as committed to renewable energy (as a couple of turbines could be bugger all to its profits) OR it would also show if a small company which may have only one turbine built but is going flat out to do all it can on building a second one.

The individual consumer could then use their consumer power and choose whether they are prepared to support (be a customer) with a company which maybe making most of its money from
Fossil fuels or Nuclear but then adds a large amount to invest in renewable energy OR not be associated with companies which deal in fossil fuel based electricity at all : i.e. not supporting = not being part of the problem philosophy – OR any cross-over between the two.

Anyhow, the concept of “proportionate” investment into new renewables- (however that is done – i.e. turnover, profit, percentage of customer bills etc) basically illustrates the level of commitment to renewable energy and would really compliment the FMD to give the consumer a fuller picture of where to direct their consumer power so as to support the right thing.

(could be called the RMC =Renewable Mix Commitment?)

I only just thought of this, so not sure if its come up before as an idea – apologies if it has.

It needs refining but a description of “proportionate” investment seems a fairer way to describe commitment to green new buiild than say than absolute new build (as a huge company would win that but not necessarily be more committed).

Hi Adrian, I think along the same lines. Having spent some time looking at the issue, my conclusion is that what’s really useful and relevant to a customer of any electricity company is how much of their electricity bill will be spent building new renewables – that can be expressed as £ per customer or it can be expressed as a % of a typical electricity bill. This measure is agnostic to company size, turnover, accounting policy or anything else – it’s a straight how much of my money will you spend on building?

We’ve been publishing this data at whichgreen.org for four years now, fifths years figures are coming soon. The story is quite compelling and very consistent. The big six spend between £5 and £10 per customer per year on average, the other two green independents – Good energy and Green energy, spend £0 each year and Ecotricity spends an average £450 per customer per year.

This measure tells a customer what difference they can make by being with company A, B or C – it cuts through the marketing and the promises and looks instead at actual delivery on a per person basis. I think it works.

Zero Carbonista

This blog is about answers to the big questions - how will we keep the lights on, what kind of cars will we drive (will we drive?) and how will we feed ourselves - in a post oil world, and a world where we can't afford to keep burning things and throwing things away. Energy, Transport and Food are the three big issues.